Tavern Association Sours Montana Microbreweries’ Mash

By Brent Zundel
For the MSU Exponent
March 21, 2013

If one special interest group has its way, Montana taps might soon run dry from Wibaux to Whitefish. The Montana Tavern Association (MTA) has spent the current legislative session sponsoring bills that would devastate the state’s burgeoning microbrewery scene.

Illustration by Jen Rogers, MSU Exponent

With our state ranking second in the nation for microbreweries per capita, Montanans love our beer. An October 2012 study showed that craft breweries contribute $50 million to the economy, $1.5 million to the state’s coffers and about 500 jobs to the state.

Despite this, at the start of the 2013 legislative session, Rep. Jeff Welborn, R-Dillon, introduced a bill that would have restricted microbreweries to selling only 10 percent of their beer on site. The rest would have to be sold at bars or retail outlets, a requirement that could have shuttered 31 of Montana’s 38 microbreweries. Vigorous and immediate uproar killed the bill.

The text of another MTA-backed bill, sponsored by Rep. Roger Hagan, R-Great Falls, was just released Tuesday, March 19. This bill is no better: It would allow breweries to sell only 40 percent of their beer in sample rooms.

Customer-focused microbreweries

The bars and taverns argue that they’re trying to level the playing field with microbreweries, who aren’t required to purchase a liquor license and are thus operating as “non-licensed bars” instead of beer manufacturers. But the reality of the controversy is that much of the microbreweries’ increasing popularity stems from the MTA and its members’ failure to meet the needs of their customers.

For decades, Montana’s bars decided that they wanted to make their money by “becoming neon-filled, smoke-filled, dimly lit ‘casinos’ selling mostly beer produced by out-of-state mega-breweries,” in the words of Helena columnist Bill Schneider. In contrast, microbreweries created well-lit, community-focused pubs that were family friendly to boot (Butte’s Quarry Brewing, for example, has a kid’s play area). And consumers flocked to them.

Our archaic liquor laws also share some of the burden for the current dilemma because, unfortunately, beer drinking in Montana is a complicated business. A 1999 law allows breweries that produce between 300 and 10,000 barrels per year to sell each customer three pints per day between 10 a.m. and 8 p.m. as a “sample” of their wares. Ironically, the MTA supported the initial law.

Throughout the last couple legislative sessions, the MTA has loudly complained that breweries aren’t following the “original intent” of the 1999 law because, in essence, they didn’t think that breweries would ever be desirable places. An anonymous industry representative told Missoula beer blog Growler Fills that breweries’ sample rooms were supposed to be “small concrete rooms with whitewashed walls.”

They were never supposed to have fun amenities like dancing, food, music, or illegal peanuts and popcorn. The taverns aren’t really interested in leveling the playing field; they’re afraid they can’t compete with microbreweries, so they’re trying to legislate them into impotence.

An archaic licensing system

As it stands, full-fledged bars are licensed through a quota system dating back to 1947 that artificially limits the availability of “all-beverage” licenses, which allow owners to install 20 gaming machines, serve any kind of alcohol and stay open from 8 to 2 a.m.

Hagan’s 60/40 bill would allow breweries to purchase an all-beverage license on the open market or pay a kingly $100,000 if one isn’t available. After two years of transition, however, all new breweries would be forced to purchase a license on the open market.

The unfair regional costs associated with the current system are clear: The all-beverage license for Tamarack Brewing’s restaurant/bar in Flathead County cost only $400, but its Missoula branch — located in an already overstretched region — paid a whopping $750,000.

Supporting local industry shouldn’t be a partisan issue. Our state’s microbreweries add value to home-grown agricultural goods like barley, employ Montanans and provide healthy, community-focused environments. When it comes down to it, this tavern bill doesn’t even have anything to do with taverns; it’s all about regulating their already over-regulated competitors and undermining the free market and consumer choice.

Rep. Christy Clark, R-Choteau, is preparing to introduce a joint resolution that would begin an interim committee to study Montana’s current alcohol licensing laws. Perhaps such a proposal would allow brewers and tavern owners to work out a solution over a few pints of Montana’s finest and avoid proxy battles in the Legislature.

In the end though, it’s likely that Montana will need to update its archaic liquor laws, perhaps by introducing more licenses and simultaneously compensating current owners or perhaps by creating special microbrewery licenses that facilitate economic growth.

Former Rep. Debbie Kottel, D-Great Falls, once mused that “Montana can become the Napa Valley of beer.” Not only would that be a boon for the economy, but it would be one more reason to be proud to be a Montanan.

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